TOKYO (Reuters) – Asian stock markets saw a positive turn on Thursday, buoyed by softer-than-expected U.S. inflation figures that helped Wall Street recover from two consecutive days of heavy losses.
Equities in Japan and South Korea advanced, while markets in Hong Kong and China showed mixed results. U.S. stock futures also surged in early Asian trading, further supporting the momentum from the previous session. Despite Wednesday’s rebound in the S&P 500 and Nasdaq 100, both major U.S. benchmarks remained more than 3% lower for the week.
Meanwhile, U.S. Treasuries remained largely unchanged following the inflation data, with the yield on the 10-year U.S. Treasury rising by 3 basis points to 4.3%. The two-year yield climbed 4 basis points. The U.S. dollar index remained flat on Wednesday, reflecting a generally muted market response.
This relative stability in the bond market is seen as an indication that the volatility generated by U.S. President Donald Trump’s aggressive trade policies continues to weigh on global investor sentiment.
“Frequent updates from the U.S. and China are introducing considerable market volatility,” said Christina Woon, a portfolio manager at Eastspring Investments, in an interview with Bloomberg Television. Woon noted that the previously dominant view of U.S. economic exceptionalism has been fading, with markets now shifting toward a more favorable outlook for Asia, particularly China.
February’s Consumer Price Index (CPI) data showed a 0.2% increase, falling short of the consensus estimate of 0.3%. This softer inflation reading has offered relief, as it suggests that the economic impact of the ongoing trade wars—especially tariffs—might not be as severe as initially feared. The core CPI, which excludes volatile food and energy prices, also rose by 0.2%.
Oscar Munoz and Gennadiy Goldberg at TD Securities emphasized that despite the better-than-expected CPI report, significant uncertainty remains, particularly with regard to inflation’s future trajectory. “The outlook remains clouded by trade policy developments,” they noted, adding that the Federal Reserve is unlikely to alter its policy stance in the near term.
Later Thursday, the U.S. government will release its Producer Price Index (PPI), which could provide further insights into inflationary pressures ahead of the Federal Reserve’s favored inflation gauge later this month.
Adding to market tensions, President Trump on Wednesday threatened to respond to the European Union’s countermeasures against his newly imposed 25% tariffs on steel and aluminum. This raised concerns about further escalation in the global trade conflict. Earlier in the day, Canada announced a fresh round of tariffs, imposing 25% duties on $20.8 billion worth of U.S. goods, including steel and aluminum, in retaliation to U.S. trade policies.
In Asia, key economic data releases are also expected. Thailand’s consumer confidence index, Hong Kong’s industrial production and producer prices, and India’s trade data are among the scheduled releases. China’s money supply data is also anticipated by March 15.
On the corporate front, U.S. tech stocks played a pivotal role in the broader market rebound. The Magnificent Seven, a group of major tech companies, rose by 2.3%, marking its best performance since January. Intel Corp. also made headlines with the announcement of a new CEO appointment.
Meanwhile, Chinese authorities summoned Walmart Inc. executives over reports that the company had asked suppliers to absorb rising costs resulting from U.S. tariffs.
The Japanese yen held steady on Thursday, while the Bank of Japan indicated that it sees little reason to intervene in the bond market, despite benchmark yields reaching their highest levels since 2008.
In commodity markets, gold prices held steady at approximately $2,934 per ounce, while West Texas Intermediate (WTI) crude extended its gains, rising for the third consecutive session.
Key events to watch this week include:
- Eurozone industrial production report on Thursday
- U.S. Producer Price Index (PPI) and initial jobless claims on Thursday
- U.S. University of Michigan consumer sentiment report on Friday
Market Highlights:
Stocks:
- Japan’s Topix: +0.7%
- Australia’s S&P/ASX 200: -0.2%
- Hong Kong’s Hang Seng: +0.1%
- Shanghai Composite: Little changed
Currencies:
- Bloomberg Dollar Spot Index: Little changed
- Euro: $1.0889
- Yen: ¥148.28 per dollar
- Offshore Yuan: 7.2390 per dollar
Cryptocurrencies:
- Bitcoin: +0.8%, $83,746.56
- Ether: +0.6%, $1,902.25
Bonds:
- U.S. 10-year Treasury yield: 4.31%
- Australia’s 10-year yield: 4.43%
Commodities:
- WTI Crude: -0.2%, $67.52 per barrel
- Spot Gold: +0.1%, $2,937.80 per ounce
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